Family business boards can be inherently burdened with conflicts of interest. Every decision they make attempts to benefit both the company and relatives. Yet, as the saying goes, you can’t serve two masters. Some may only put their best interests above everyone else, making them a liability.
These conflicts aren’t always apparent, and they may happen by accident. No matter how they arise, Positively People knows how to manage them. Read on to learn how to address any conflicts of interest when they happen.
Where Does the Family and the Business Side Overlap?
Inevitably, the business will have an overlap with family responsibilities, making the separation difficult. Pinpointing everyone’s roles and duties that contribute to shared obligations will allow you to reevaluate them.
Whether it’s individuals or departments, they may not realize that their jobs intersect. Meeting with them directly can help with splitting up their daily operations. Some overlap comes from rapid expansion, while others stem from poor planning. You should regularly revisit your leadership’s list of responsibilities to prevent repeat responsibilities between them.
Recognize Conflicts of Interest Within Family Business Boards
One disadvantage that family brands have is forming under inherently conflicting ideas. It’s challenging to stay objective when parents or siblings serve together and have very different ideas.
Recognizing how these dynamics can change the organization’s focus allows for fairer decisions. It’s also why it’s wise to have independent members on your company’s board. Tying too many household expenses to the company can also create tension. It’s best to revisit what utilities will continue to be covered by the business and what is considered a personal expense.
Write Down Clear Job Descriptions, Titles, and Responsibilities
The roles within family business boards can differ wildly from other jobs within the organization. These members may find it difficult to only focus on one at a time. While it may seem like red tape, explicitly defining job roles can eliminate overlapping duties. Going around to each director also allows everyone to understand better who handles what.
Other roles may only be ceremonial, but these members may try and take on real responsibility. Redefining everyone’s place within the business maintains better focus and control.
Who Makes What Decisions on Your Family Business Boards?
Another area for conflict is determining who has the authority to handle what problems. Similar to defining job roles, you also can’t let members take on whatever they like. Every director exists for a specific purpose, whether they work through advice or advanced managerial training, they have an area of expertise. When they don’t receive the problems they should handle, solutions can become wildly unpredictable.
Your team may need to write out exactly what people have authority over specific items. This ensures that no one steps on anyone else’s toes during any decision-making processes.
Solve All of Your Conflict of nterests Within Your Family Business Boards Now
One of the best reasons to consider family business consulting is to keep your firm on course. Many brands begin drifting away from their goals because of conflicts of interest.
We offer continuity planning and course corrections for any type of company. You can call on us whenever your family governance boards aren’t being effective. Contact Positively People for family business advisory services you can trust.
Learn more about Positively People Services in Family Business Boards.
